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Before the
Federal Communications Commission
Washington, D.C. 20554
)
)
In the Matter of File No. EB-08-IH-1386
)
Telseven, LLC NAL/Acct. No. 201232080024
)
Patrick B. Hines FRN 0009834466
)
Apparent Liability for Forfeiture FRN 0021816459
)
)
NOTICE OF APPARENT LIABILITY FOR FORFEITURE
Adopted: June 14, 2012 Released: June 14, 2012
By the Commission:
I. INTRODUCTION
1. In this Notice of Apparent Liability for Forfeiture (NAL), we find
that Telseven, LLC (Telseven or Company) apparently violated: (1)
Section 254(d) of the Communications Act of 1934, as amended (Act),
and Section 54.706 of the Commission's rules by willfully or
repeatedly failing to contribute fully to the Universal Service Fund
(USF); (2) Section 54.711(a) of the Commission's rules by willfully or
repeatedly filing inaccurate FCC Forms 499-Q; (3) Section 251(e)(2) of
the Act and Section 52.17 the Commission's rules by willfully or
repeatedly failing to make full contributions to the administration of
the North American Numbering Plan (NANP); (4) Section 251(e)(2) of the
Act and Section 52.32(a) of the Commission's rules by willfully or
repeatedly failing to make full contributions to the administration of
local number portability (LNP); and (5) Sections 1.1154 and
1.1157(b)(1) of the Commission's rules by willfully or repeatedly
failing to pay regulatory fees when due. Based on our review of the
facts and circumstances surrounding this matter, and for the reasons
discussed below, we find that Telseven is apparently liable for
forfeiture penalties totaling one million, seven hundred fifty-eight
thousand, four hundred sixty-five dollars ($1,758,465).
II. BACKGROUND
2. The Act codifies Congress's historic commitment to promote universal
service to ensure that consumers in all regions of the nation have
access to affordable, quality telecommunications services. In
particular, Section 254(d) of the Act requires, among other things,
that "[e]very telecommunications carrier [providing] interstate
telecommunications services . . . contribute, on an equitable and
nondiscriminatory basis, to the specific, predictable, and sufficient
mechanisms established by the Commission to preserve and advance
universal service." In implementing this Congressional mandate, the
Commission directed all telecommunications carriers providing
interstate telecommunications services and certain other providers of
interstate telecommunications to register with the Commission, comply
with annual and quarterly filing requirements, and contribute to the
USF based on their interstate and international end-user
telecommunications revenues. The Universal Service Administrative
Company (USAC) currently administers the USF. USAC uses contributors'
revenue projections, as reported on Form 499-Q, to determine each
contributor's monthly universal service contribution obligation and
bills the carrier accordingly each month. Consistent with the Debt
Collection Improvement Act of 1996 (DCIA), USAC transfers invoices for
USF contributions that have become over 90 days delinquent to the
Commission for further action to collect the outstanding debt. A
provider's failure to pay its share into the USF skews the playing
field by giving the provider an economic advantage over its
competitors, who must then shoulder more than their fair share of the
costs of universal service.
3. Section 251(e)(1) of the Act directs the Commission to oversee the
administration of telecommunications numbering to ensure the
availability of telephone numbers on an equitable basis. Section
251(e)(2) of the Act requires that "[t]he cost of establishing
telecommunications numbering administration arrangements . . . shall
be borne by all telecommunications carriers on a competitively neutral
basis as determined by the Commission." In carrying out this statutory
directive, the Commission adopted Section 52.17 of its rules, which
requires, among other things, that all telecommunications carriers
contribute on the basis of their end-user telecommunications revenues
for the prior calendar year on a competitively neutral basis to meet
the costs of numbering administration.
4. Section 251(b)(2) of the Act establishes that every telecommunications
carrier has a duty to provide local number portability in accordance
with requirements established by the Commission. Section 251(e)(2) of
the Act requires, in pertinent part, that "[t]he cost of
establishing . . . number portability shall be borne by all
telecommunications carriers on a competitively neutral basis as
determined by the Commission." In implementing this statutory
directive, the Commission adopted Section 52.32 of its rules, which
requires, among other things, that all telecommunications carriers
contribute to the costs of local number portability on the basis of
their end-user telecommunications revenues for the prior calendar
year.
5. Pursuant to Section 1.1151 of the Commission's rules, providers of
interstate telecommunications services and other providers must pay
regulatory fees to the Commission to cover the costs of certain
regulatory activities. In particular, Sections 1.1154 and 1.1157(b)(1)
of the Commission's rules require that interstate telecommunications
carriers pay regulatory fees on the basis of their interstate and
international end-user revenues. Such fees must be paid on an annual
basis, and failure to do so subjects a carrier to late payment
penalties, as well as to possible revocation of its operating
authority. Further, under its "red light rule," the Commission
withholds action on applications or requests for benefits from any
entity that has failed to timely meet its USF, TRS, NANP, and LNP
contribution obligations or to pay its regulatory fees when due, and
ultimately dismisses such applications or other requests if the
delinquencies are not resolved.
6. The Commission has established specific procedures for the
administration of the USF, numbering, LNP, regulatory fee, and other
associated federal regulatory programs. The procedures include the
requirement that each telecommunications provider file accurate
company-specific revenue data on FCC Form 499-A annually. With certain
exceptions, interstate telecommunications providers also must file
good faith estimates of their projected revenue on Form 499-Q. The
numbering program and LNP administrators and the Commission use the
data reported on Form 499-A to determine and bill for the
telecommunications provider's LNP administration, numbering
administration, and regulatory fee payment obligations, and USAC uses
that data as well as the data reported on Form 499-Q to determine and
bill for the provider's USF contribution obligations. Carriers must
pay their contribution invoices in a timely manner, and the
Commission's rules explicitly warn contributors that failure to file
forms or submit payments potentially subjects them to enforcement
action.
7. Telseven is a Florida-based company that held itself out and
registered with the Commission as a "provider of interstate
telecommunications services." Telseven described its
telecommunications service as an "interstate Enhanced Number
Assistance Directory Service" (ENADA). This service, according to
Telseven, offered consumers the ability to obtain information about
recently disconnected or out-of-service toll free numbers. A consumer
using this service would contact Telseven by dialing one of the
approximately one million such numbers that Telseven controlled. A
consumer dialing one of these numbers typically heard a message
offering Telseven's assistance in finding the current toll-free number
of the party the consumer was trying to reach. A recorded message
would then provide the consumer with an "equal access code" (i.e.,
dial-around number) for contacting Telseven's directory assistance
platform in Nevada. Consumers dialing this equal access code would
have their calls transmitted to the Nevada platform by Telseven,
rather than by the consumer's prescribed long distance carrier. Since
Telseven did not offer service in Nevada, all calls using this equal
access number were interstate long distance calls.
8. Telseven imposed per call charges on many of the consumers who
contacted its Nevada platform. These charges included, in addition to
any fees that Telseven imposed for transmission to the Nevada platform
and the other aspects of Telseven's purported service, a per call
"Federal Universal Service Fund charge." Telseven also "charge[d] an
administrative recovery fee of $1.65 in any month" the consumer dialed
its "directory assistance service . . . to offset the cost Telseven
incurs in complying with regulatory obligations" including "the cost
of complying with the Federal Universal Service Charge."
9. On July 2, 2008, the Enforcement Bureau (Bureau) issued a letter of
inquiry (LOI) to Telseven seeking information about its compliance
with the USF contribution rules and other related regulatory
obligations. On September 22, 2008, Telseven responded to the LOI. In
response to the Bureau's requests for additional financial information
and the identity of all Telseven affiliates, Telseven filed
supplemental information on December 18, 2009, June 15, 2010, and July
12, 2010. The information developed through the Bureau's investigation
indicates that Telseven apparently failed to fully and timely
contribute to the USF and the NANP and LNP cost recovery mechanisms,
provide good faith estimates of its projected telecommunication
revenue in its Quarterly Worksheets, and pay its annual regulatory
fees to the Commission.
10. On April 20, 2012, Telseven filed for Chapter 7 bankruptcy in the
United States Bankruptcy Court for the Middle District of Florida,
Jacksonville Division. Telseven informed the Bureau of this Chapter 7
bankruptcy filing on April 23, 2012. By April 26, 2012, Telseven's
Internet website stated that the Company is "no longer providing
services."
III. DISCUSSION
11. Under Section 503(b)(1) of the Act, any person who is determined by
the Commission to have willfully or repeatedly failed to comply with
any provision of the Act or any rule, regulation, or order issued by
the Commission shall be liable to the United States for a forfeiture
penalty. Section 312(f)(1) of the Act defines willful as "the
conscious and deliberate commission or omission of [any] act,
irrespective of any intent to violate" the law. The legislative
history to Section 312(f)(1) of the Act clarifies that this definition
of willful applies to both Sections 312 and 503(b) of the Act, and the
Commission has so interpreted the term in the Section 503(b) context.
The Commission may also assess a forfeiture for violations that are
merely repeated, and not willful. "Repeated" means that the act was
committed or omitted more than once, or lasts more than one day. To
impose such a forfeiture penalty, the Commission must issue a notice
of apparent liability, and the person against whom the notice has been
issued must have an opportunity to show, in writing, why no such
forfeiture penalty should be imposed. The Commission will then issue a
forfeiture if it finds, based on the evidence, that the person has
violated the Act or a Commission rule.
12. The fundamental issues in this case are whether Telseven apparently
violated the Act and the Commission's rules by willfully or repeatedly
failing to make required contributions to the USF and the NANP and LNP
cost recovery mechanisms, by failing to file accurate Quarterly
Worksheets, and by failing to pay required regulatory fees to the
Commission. We answer these questions in the affirmative. As set forth
below, we conclude that Telseven is apparently liable for forfeiture
for willful or repeated violations of Section 251(e)(2) and 254(d) of
the Act and Sections 1.1154, 1.1157(b)(1), 52.17, 52.32(a), 54.706,
and 54.711 of the Commission's rules. Based on the facts and
circumstances before us, we therefore conclude that Telseven is
apparently liable for forfeitures totaling one million, seven hundred
fifty-eight thousand, four hundred sixty-five dollars ($1,758,465).
A. Telseven Apparently Failed to Make Full and Timely Universal Service
Fund Contributions
13. We conclude that Telseven apparently violated Section 254(d) of the
Act and Section 54.706(a) of the Commission's rules by willfully or
repeatedly failing to contribute fully and timely to the universal
service support mechanisms. Section 54.706(a) of the Commission's
rules unambiguously directs that "[e]ntities [providing] interstate
telecommunications to the public . . . for a fee . . . must contribute
to the universal service support mechanisms." As set forth above,
Telseven not only held itself out as-and has registered as-a provider
of "interstate telecommunications services," but apparently also
provided and charged for the interstate long distance transmission to
its Nevada platform. Indeed, Telseven's fees to the public apparently
included both per-call and monthly charges for the USF. Those fees, in
combination with Telseven's registration with the Commission as a
provider of interstate telecommunications services, make clear that
Telseven was holding itself out to the public as providing an
interstate telecommunications service.
14. According to USAC, Telseven's outstanding balance due for delinquent
USF contributions is $1,056,929.62. Our rules direct USAC to apply the
"American Rule" of accounting whereby any USF payment of less than the
total amount due is applied first to the oldest past due debt. On the
basis of that rule, USAC determined that the last monthly USF invoice
that Telseven paid in full was the invoice dated October 22, 2007 and
due November 15, 2007, and that the last monthly USF invoice that
Telseven partially paid was the invoice dated November 22, 2007 and
due December 14, 2007.
15. In its April 2009 and July 2009 Form 499-Q filings, Telseven projected
such low telecommunications revenues that USAC placed the company in
de minimis status for 2009, meaning that Telseven would not be
required to contribute to the USF for that year. Based on the actual
revenues reported by Telseven on its Form 499-A for 2009, Telseven was
not de minimis in 2009. This resulted in subsequent true-up billing by
USAC for each month from July 2010 through September 2010. The last
invoice USAC issued to Telseven with new USF contribution charges was
for September 2010. For each month from October 2010 through February
2011, inclusive, the invoices USAC issued to Telseven added interest
on unpaid obligations and DCIA penalty charges as our rules require.
After February 2011, USAC transferred all of Telseven's outstanding
USF debt to the Commission for collection in accordance with the DCIA.
USAC therefore has not sent any additional invoices to Telseven since
February 22, 2011. The absence of a monthly invoice from USAC,
however, does not relieve Telseven of its outstanding payment
obligations. The Commission has repeatedly stated that carriers must
pay their obligations to USAC regardless of whether or not they
receive a bill from USAC. Telseven's violations for unpaid USF
contributions continued with each subsequent day on which it failed to
make full payment. Based on the record, we find that Telseven has
apparently violated Section 254(d) of the Act and Section 54.706 of
the Commission's rules by willfully or repeatedly failing to
contribute fully and timely to the USF from December 2007 to April
2012, inclusive.
B. Telseven Apparently Failed to Provide Good Faith Estimates of Its
Quarterly Telecommunications Revenue
16. Our rules require carriers to file good faith estimates of their
quarterly telecommunications revenue on Form 499-Q. A carrier's
failure to provide such estimates has serious implications for the USF
program because USAC uses the revenue reported on Form 499-Q to
calculate each carrier's monthly USF contribution obligation, if any,
subject to an annual true-up based on the actual revenues, as reported
on the entity's Form 499-A.
17. The Forms 499-Q that Telseven filed in April 2009 and July 2009
apparently failed to provide good faith estimates of Telseven's
projected telecommunications revenue for the third and fourth quarters
of 2009. In those Quarterly Worksheets, Telseven projected revenues
sufficiently low for USAC to place Telseven in de minimis status for
2009. Telseven's actual revenue for 2009, as reported on its Form
499-A filing due April 1, 2010, was more than three times greater than
Telseven had predicted in its Form 499-Q filings and showed that
Telseven did not qualify for de minimis status in 2009. USAC
determined that Telseven's actual revenues meant that it had a
$13,444.62 contribution obligation to the USF for 2009. We deem the
difference between Telseven projected revenue, as reported on its
Forms 499-Q and its actual revenue, as reported on its Forms 499-A, to
be so significant as to show that the Form 499-Q revenue estimates
were apparently not made in good faith, as Section 54.711(a) of our
rules requires. Based on the record, we therefore find that Telseven
apparently violated Section 54.711(a) by willfully or repeatedly
filing Forms 499-Q that failed to provide good faith estimates of
Telseven's quarterly telecommunications revenue.
C. Telseven Apparently Failed To Make Full and Timely Contributions to
the NANP Cost Recovery Mechanism
18. We further find that Telseven has apparently violated Section
251(e)(2) of the Act and Section 52.17(a) of the Commission's rules by
willfully or repeatedly failing to make timely contributions toward
the costs of number administration. As a provider of interstate
telecommunications service, Telseven was obligated to contribute to
the NANP administration cost recovery mechanisms on the basis of the
end-user telecommunications revenues it reported on its Annual
Worksheet (Form 499-A) during the period covered by this NAL.
19. The record demonstrates that Telseven failed to timely remit its NANP
payment for 2011. The due date on the invoice was July 12, 2011, but
the invoice remains unpaid. We therefore conclude based on the record
that Telseven has apparently violated Section 251(e)(2) of the Act and
Section 52.17(a) of the Commission's rules by willfully or repeatedly
failing to make timely NANP administration contributions for 2011.
D. Telseven Apparently Failed To Make Full and Timely Contributions to
the LNP Cost Recovery Mechanism
20. The record demonstrates that Telseven failed to contribute fully and
timely to the LNP cost recovery mechanism in 2005, 2010, and 2011. As
of April 23, 2012, Telseven had not made payment on the LNP invoice
issued by the LNP administrator on December 31, 2005, which was due on
February 14, 2006. Telseven made only a partial payment for 2010. It
has not remitted any payment for 2011. Telseven's outstanding LNP
contribution debt is $5,027.20. Based on the record developed in our
investigation, we find that Telseven has apparently violated Section
251(e)(2) of the Act and Section 52.32(a) of the Commission's rules by
willfully or repeatedly failing to contribute fully and timely to the
LNP cost recovery mechanism in 2005, 2010, and 2011.
E. Telseven Apparently Failed to Pay Its Regulatory Fees
21. As an interstate telecommunications service provider, Telseven was
required to pay regulatory fees on the basis of its interstate and
international end-user revenues reported on its Annual Worksheet.
According to Commission records, Telseven has not paid its annual
regulatory fees to the Commission for 2009 and 2010. Telseven is
delinquent in the amount of $22,736.25. We find that Telseven
apparently violated Sections 1.1154 and 1.1157(b)(1) of the
Commission's rules by willfully or repeatedly failing to pay
regulatory fee program payments when due.
F. Proposed Forfeitures
22. Section 503(b)(1) of the Act provides that any person who willfully or
repeatedly fails to comply with any provision of the Act or any rule,
regulation, or order issued by the Commission shall be liable to the
United States for a forfeiture penalty. Section 503(b)(2)(B) of the
Act authorizes the Commission to assess a forfeiture against a
telecommunications carrier of up to $150,000 for each violation or
each day of a continuing violation, up to a statutory maximum of
$1,500,000 for a single act or failure to act. In determining the
appropriate forfeiture amount, we consider the factors enumerated in
Section 503(b)(2)(E) of the Act, including "the nature, circumstances,
extent, and gravity of the violation and, with respect to the
violator, the degree of culpability, any history of prior offenses,
ability to pay, and such other matters as justice may require," as
well as our forfeiture guidelines.
23. We find that under the American Rule of accounting, in which all
payments are applied first to the oldest outstanding debt, the last
Telseven USF invoice that was paid in full was the invoice issued on
October 22, 2007 that was due on November 15, 2007, and that the last
Telseven USF invoice that received partial payment was the invoice
issued on November 22, 2007 that was due on December 14, 2007. Since
that last partial payment, Telseven has not made any payments on its
outstanding USF obligations. The Commission has long recognized that
failure to make universal service contributions is an egregious
offense. It not only deprives the USF of resources necessary to
preserve and advance universal service, but it also bestows on
delinquent entities an unfair competitive advantage by shifting to
compliant contributors the economic costs and burdens associated with
universal service. An entity's failure to make required universal
service contributions frustrates Congress's policy objective in
Section 254(d) of the Act to ensure the equitable and
non-discriminatory distribution of universal service costs among all
telecommunications providers. The Commission has established a base
forfeiture amount of $10,000 for each month in which a contributor has
failed to fully pay required universal service contributions and
$20,000 for each month in which a contributor has failed to make any
required universal service contribution, plus an upward adjustment
based on approximately one-half of the largest amount of Telseven's
unpaid USF contributions during the period covered by the Commission's
investigation. In addition, the Commission has treated failures to pay
universal service and other obligations as continuing violations. As
noted above, because Telseven has not made any payments on any USF
invoices since late 2007, our forfeiture calculation reflects not only
violations that began within the last twelve months, but also
violations that began prior to the last twelve months and continued
during the twelve-month period preceding this NAL.
24. As a result, we find that Telseven is apparently liable for a
forfeiture for willful or repeated failure to make any contribution to
the USF for fifty-three months, from January 2008 to May 2012,
inclusive. Accordingly, we assess a $20,000 forfeiture for each of the
fifty-three months in which Telseven failed to remit any contribution
toward its outstanding USF obligation, for a total of $1,060,000. We
also assess a $10,000 forfeiture for Telseven's failure to fully pay
the invoice due on December 14, 2007. Thus, we find Telseven
apparently liable for a base forfeiture of $1,070,000 for its willful
or repeated failures to contribute fully and timely to the USF on
fifty-four months from December 2007 to May 2012, inclusive. Moreover,
consistent with our approach for assessing liability for USF
violations, and taking into account all of the factors enumerated in
Section 503(b)(2)(E) of the Act, we also add an upward adjustment of
$528,465 to the base forfeiture-approximately one-half of the largest
amount of Telseven's unpaid USF contributions during the period
covered by the Commission's investigation. We therefore find Telseven
apparently liable for a forfeiture of one million, five hundred
ninety-eight thousand, four hundred sixty-five dollars ($1,598,465)
for willful or repeated failures to contribute fully and timely to the
USF.
25. As we noted above, a carrier's obligation to file Annual and Quarterly
Worksheets providing good faith estimates of its telecommunications
revenue is directly linked to, and thus has serious implications for,
administration of the USF, TRS, NANP, LNP and regulatory fee programs.
Telseven filed two Quarterly Worksheets that apparently failed to meet
this standard. The Commission has established precedent for a
forfeiture of $50,000 for failure to file a Worksheet or for filing an
inaccurate Quarterly or Annual Worksheet. We find a forfeiture of
$50,000 also appropriate for filing a Quarterly Worksheet that fails
to provide a good faith estimate of the filer's projected
telecommunications revenue. Accordingly, we find that Telseven is
apparently liable for a forfeiture of one hundred thousand dollars
($100,000) for its willful or repeated failure to file Quarterly
Worksheets providing such good faith estimates by the May 1 and August
1, 2009 filing deadlines.
26. We also conclude that Telseven apparently failed to contribute to the
NANP administration cost recovery mechanism in 2011. The failure to
make required NANP administration contributions hampers the
Commission's ability to ensure that the cost of establishing
telecommunications numbering administration arrangements is "borne by
all telecommunications carriers on a competitively neutral basis" as
Congress envisioned. The Commission has generally established a base
forfeiture amount of $10,000 for each instance in which a contributor
fails to make required contributions to the NANP administration cost
recovery mechanism. Consequently, and consistent with precedent, we
find that Telseven is apparently liable for a forfeiture of ten
thousand dollars ($10,000) for willful or repeated failure to make
full and timely payment of its required contribution toward the NANP
administration cost recovery mechanism for 2011.
27. We also find that Telseven is apparently liable for a forfeiture for
willfully or repeatedly failing to make full and timely contributions
toward LNP cost recovery mechanisms in 2005, 2010, and 2011. The
Commission has prescribed a $10,000 base forfeiture amount for failure
to pay LNP contributions. We therefore find Telseven apparently liable
for a forfeiture of thirty thousand dollars ($30,000) for its willful
and repeated failure to make full and timely payment of its required
contribution toward the LNP administration cost recovery mechanism for
2005, 2010, and 2011.
28. Finally, we conclude that Telseven has apparently failed to fully pay
its regulatory fees to the Commission. Telseven's violations for
failing to fully pay its regulatory fees are continuing until the
amounts owed are fully paid. The Commission has established a base
forfeiture amount of $10,000 for failure to make required regulatory
fee payments. We find Telseven apparently liable for a forfeiture of
twenty thousand dollars ($20,000) for its willful or repeated failures
to fully pay its regulatory fees to the Commission for 2009 and 2010.
G. All Obligations under This NAL Extend to Mr. Patrick Hines
29. The Commission may "pierce the corporate veil" and hold one entity or
individual liable for the acts or omissions of a different, related
entity when: (1) there is a common identity of officers, directors or
shareholders; (2) there is common control between the entities; and
(3) it is necessary to preserve the integrity of the Communications
Act and to prevent the entities from defeating the purpose and
provisions of statutory provisions. In Capital Telephone Co. v. FCC,
for example, the United States Court of Appeals for the D.C. Circuit
upheld the Commission's decision to pierce the corporate veil of an
applicant for a paging frequency license after concluding that (a) the
applicant was wholly-owned and controlled by another applicant for a
paging frequency in the same area at a different location and (b)
"[i]t would do violence to the statutory command to grant both
desirable frequencies to a single commonly controlled enterprise
having only one real owner."
30. Here, Telseven appears to be the corporate vehicle for the activities
of just one person, Mr. Patrick B. Hines, a/k/a P. Brian Hines. Mr.
Hines is the sole officer and director of Telseven, and as such has
exercised complete control over Telseven. Mr. Hines is also a
beneficiary, and likely the sole beneficiary, of the Patrick Hines
Revocable Trust, which owns 100 percent of Telseven. Indeed, Mr. Hines
has been identified in official Commission filings as holding 100
percent of Telseven's equity, either directly or indirectly. Further,
in a proceeding before the California Public Utilities Commission,
Telseven acknowledged that it is wholly-owned by the Patrick Hines
Revocable Trust and confirmed that it "is not operated by any other
entity . . . not controlled by any other entity . . . [and] is not
managed by any other entity." Thus, it appears that Mr. Hines is the
sole owner of Telseven. Telseven also identified Mr. Hines as its
president in its company registration information provided to the
Commission through the Commission Registration System (CORES). On
January 5, 2004, Mr. Hines, acting in his capacity as the president of
Telseven, executed the Company's "Articles of Amendment of
Organization."
31. As in Capital Telephone Co, it is necessary here to look beyond the
Telseven corporate name and take "cognizance of the identity of
ownership and control" between Telseven and Patrick Hines in order to
implement core statutory directives and our implementing rules.
Specifically, Section 254(d) of the Act mandates that "[e]very
telecommunications carrier that provides interstate telecommunications
services shall contribute, on an equitable and nondiscriminatory
basis" to the USF. Similarly, Section 251(e)(2) of the Act requires
that all telecommunications carriers shall bear telecommunications
numbering and number portability costs on a competitively neutral
basis. Finally, Section 503(b)(1) of the Act specifies that "[a]ny
person who is determined by the Commission . . . to have willfully or
repeatedly failed to comply with any of the provisions of [the] Act or
[Commission] rule . . . shall be liable . . . for a forfeiture
penalty." In these circumstances, we are entitled to look through
Telseven's corporate structure to prevent Mr. Hines from using a
corporate entity to circumvent these statutory directives and our
rules implementing them. Because Mr. Hines apparently solely owns,
controls, and manages Telseven, we find it consistent with our
precedent to hold Mr. Hines personally liable for the actions of
Telseven. Accordingly, for purposes of this NAL, the term Telseven
includes Patrick Hines personally and all obligations under this NAL
therefore also extend to Mr. Hines.
IV. CONCLUSION
32. In light of the seriousness, duration, and scope of the apparent
violations, we propose forfeitures totaling one million, seven hundred
fifty-eight thousand, four hundred sixty-five dollars $1,758,465)
against Telseven, consisting of one million, five hundred ninety-eight
thousand, four hundred sixty-five dollars ($1,598,465) for failure to
make full and timely USF contributions; one hundred thousand dollars
($100,000) for failure to file accurate Quarterly Telecommunications
Reporting Worksheets; ten thousand dollars ($10,000) for failure to
make full and timely NANP contributions; thirty thousand dollars
($30,000) for failure to make full and timely LNP contributions; and
twenty thousand dollars ($20,000) for failure to make full and timely
regulatory fee payments to the Commission.
33. We caution that additional violations of the Act or the Commission's
rules could subject Telseven and its principal to further enforcement
action. Such action could take the form of higher monetary
forfeitures, disqualification of Telseven's principals, including Mr.
Hines, from providing any interstate common carrier service without
the prior consent of the Commission, and/or revocation of Telseven's
and Mr. Hines's authority to operate any business that is subject to
the Commission's regulatory jurisdiction under the Act.
V. ORDERING CLAUSES
34. ACCORDINGLY, IT IS ORDERED that, pursuant to Section 503(b) of the
Act, and Section 1.80 of the Commission's rules, Telseven, LLC is
hereby NOTIFIED of its APPARENT LIABILITY FOR A FORFEITURE in the
amount of one million, seven hundred fifty-eight thousand, four
hundred sixty-five dollars ($1,758,465) for willfully or repeatedly
violating the Act and the Commission's rules.
35. IT IS FURTHER ORDERED that, pursuant to Section 1.80 of the
Commission's rules, within thirty (30) calendar days of the release
date of this Notice of Apparent Liability for Forfeiture, Telseven
SHALL PAY the full amount of the proposed forfeitures or SHALL FILE a
written statement seeking reduction or cancellation of the proposed
forfeitures.
36. Payment of the forfeiture must be made by check or similar instrument,
payable to the order of the Federal Communications Commission. The
payment must include the NAL/Account Number and FRN referenced above.
Payments by check or money order may be mailed to Federal
Communications Commission, P.O. Box 979088, St. Louis, MO 63197-9000.
Payments by overnight mail may be sent to U.S. Bank - Government
Lockbox #979088, SL-MO-C2-GL, 1005 Convention Plaza, St. Louis, MO
63101. Payments by wire transfer may be made to ABA Number 021030004,
receiving bank TREAS/NYC, and account number 27000001. An FCC Form 159
(Remittance Advice) must be submitted with any payments. When
completing the FCC Form 159, enter the Account Number in block number
23A (call sign/other ID), and enter the letters "FORF" in block number
24A (payment type code). Telseven will also send electronic
notification within forty-eight (48) hours of the date said payment is
made to Terry.Cavanaugh@fcc.gov and Robert.Krinsky@fcc.gov.
37. The written statement seeking reduction or cancellation of the
proposed forfeitures, if any, must include a detailed factual
statement supported by appropriate documentation and affidavits
pursuant to Sections 1.80(f)(3) and 1.16 of the Commission's rules.
The written statement must be mailed to Theresa Z. Cavanaugh, Chief,
Investigations and Hearings Division, Enforcement Bureau, Federal
Communications Commission, 445 12th Street, S.W., Room 4-C330,
Washington, D.C. 20554 and must include the NAL/Account number
referenced above. The written statement should also be e-mailed to
Theresa Z. Cavanaugh at Terry.Cavanaugh@fcc.gov, Pamela S. Kane at
Pamela.Kane@fcc.gov, and Robert B. Krinsky at Robert.Krinsky@fcc.gov.
38. The Commission will not consider reducing or canceling a forfeiture in
response to a claim of inability to pay unless the petitioner submits:
(1) federal tax returns for the most recent three-year period; (2)
financial statements prepared according to generally accepted
accounting practices (GAAP); or (3) some other reliable and objective
documentation that accurately reflects the petitioner's current
financial status. Any claim of inability to pay must specifically
identify the basis for the claim by reference to the financial
documentation submitted.
39. Requests for payment of the full amount of this Notice of Apparent
Liability for Forfeiture under an installment plan should be sent to:
Chief Financial Officer-Financial Operations, Federal Communications
Commission, 445 12th Street, S.W., Room 1-A625, Washington, D.C.
20554. For answers to questions regarding payment procedures, please
contact the Financial Operations Group Help Desk at 1-877-480-3201 or
E-mail: ARINQUIRIES@fcc.gov.
40. IT IS FURTHER ORDERED that a copy of this Notice of Apparent Liability
for Forfeiture shall be sent by certified mail, return receipt
requested, to each of the following: Telseven, LLC, 200 Executive Way,
Ponte Vedra Beach, Florida 32082; Doreen Abbott, P.O. Box 56257,
Jacksonville, Florida 32241-6257; Jacob A. Brown, Esq., Akerman
Senterfitt, LLP, 50 N. Laura Street, Suite 3100, Jacksonville, Florida
32202; Jason B. Burnett, Esq., GrayRobinson, P.A., 50 N. Laura Street,
Suite 1100, Jacksonville, Florida 32202; and Patrick B. Hines, 350
Ponte Vedra Boulevard, Ponte Vedra Beach, Florida 32082-1812.
FEDERAL COMMUNICATIONS COMMISSION
Marlene H. Dortch
Secretary
47 U.S.C. S: 254(d); 47 C.F.R. S: 54.706.
47 C.F.R. S: 54.711(a). Form 499-Q is also known as the Quarterly
Telecommunications Reporting Worksheet or Quarterly Worksheet.
47 U.S.C. S: 251(e)(2); 47 C.F.R. S: 52.17.
47 U.S.C. S: 251(e)(2); 47 C.F.R. S: 52.32(a).
47 C.F.R. S:S: 1.1154, 1.1157(b)(1).
47 U.S.C. S: 254(d).
47 C.F.R. S:S: 54.706(b), 54.711, 64.1195; see also 47 U.S.C. S: 254(d)
("Any other provider of interstate telecommunications may be required to
contribute to the preservation and advancement of universal service if the
public interest so requires.").
47 C.F.R. S: 54.701(a).
See id. S:S: 54.709(a), 54.713(b). The monthly bills are subject to an
annual true-up based on the actual revenues that contributors report on
FCC Form 499-A. See Federal-State Joint Board on Universal Service,
Petition for Reconsideration Filed by AT&T, Report and Order and Order on
Reconsideration, 16 FCC Rcd 5748, 5755, para. 19 & n.32 (2001) (Quarterly
Reporting Order); 47 C.F.R. S: 54.709(a). Form 499-A is also known as the
Annual Telecommunications Reporting Worksheet or Annual Worksheet.
See Debt Collection Improvement Act of 1996, Pub. L. No. 104-134, 110
Stat. 1321, 1358.
See USAC, Understanding Invoices, available at
http://www.universalservice.org/cont/invoices/ (last visited Apr. 28,
2012). Debt collection procedures may include further administrative
efforts by both the Commission and the United States Treasury or, as
appropriate, Commission referral of the delinquent debt to the Department
of Justice for enforced collection action. 47 C.F.R. S: 1.1917. Collection
efforts may result in additional charges, including interest and
penalties, as provided under 31 U.S.C. S: 3717, and administrative charges
pursuant to 47 C.F.R. S:S: 1.1940, 54.713 and 31 C.F.R. S: 285.12(j).
47 U.S.C. S: 251(e)(1).
Id. S: 251(e)(2).
47 C.F.R. S: 52.17.
47 U.S.C. S: 251(b)(2).
Id. S: 251(e)(2).
47 C.F.R. S: 52.32.
Section 9(a)(1) of the Act directs the Commission to "assess and collect
regulatory fees to recover the costs of the following regulatory
activities of the Commission: enforcement activities, policy and
rulemaking activities, user information services, and international
activities." 47 U.S.C. S: 159(a)(1); see also 47 C.F.R. S: 1.1151.
47 C.F.R. S:S: 1.1154, 1.1157(b)(1).
Id. S: 1.1157(b)(1). Section 1.1154 of the Commission's rules sets forth
the schedule of annual regulatory charges and filing locations for common
carrier services. See 47 C.F.R. S: 1.1154.
See 47 U.S.C. S: 159(c)(1), (c)(3).
47 C.F.R. S: 1.1910. The "red light rule" took effect on November 1, 2004.
See FCC Announces Brief Delay in Enforcement of Red Light Rule, Public
Notice, 19 FCC Rcd 19452 (2004).
See 47 C.F.R. S: 54.711(a); see also, e.g., FCC Form 499-A
Telecommunications Reporting Worksheet - Annual Filing, available at
http://transition.fcc.gov/Forms/Form499-A/499a-2012.pdf (last visited May
15, 2012).
See 47 C.F.R. S: 54.711(a); Quarterly Reporting Order, 16 FCC Rcd at 5755,
para. 19; see also FCC Form 499-Q Telecommunications Reporting Worksheet
- Quarterly Filing for Universal Service Contributors, available at
http://www.fcc.gov/Forms/Form499-Q/499q-2012.pdf (last visited May 15,
2012).
See 47 C.F.R. S:S: 1.1154 (regulatory fees), 52.17 (numbering), 52.32
(LNP), 54.709 (USF).
See, e.g., 47 C.F.R. S: 54.711(a) ("The Commission shall announce by
Public Notice published in the Federal Register and on its website the
manner of payment and the dates by which payments must be made.");
Proposed Fourth Quarter 2011 Contribution Factor, Public Notice, 26 FCC
Rcd 12943, 12946 (Off. Managing Dir. 2011) ("Contribution payments are due
on the date shown on the invoice."); see also 47 C.F.R. S: 54.713(b)
(noting that if a USF "contributor fails to make full payment on or before
the date due of . . . monthly invoice provided by the Administrator, the
payment is delinquent"). The Act and our rules, however, do not condition
payment on receipt of an invoice or other notice from USAC, other program
administrator, or the Commission. See, e.g., 47 U.S.C. S: 254(d); 47
C.F.R. S: 54.706(b). For instance, a carrier that does not file Form 499-A
or Form 499-Q may not receive an invoice from USAC, but is nonetheless
required to contribute to the USF, unless its revenues are considered de
minimis. See Globcom, Inc., Notice of Apparent Liability for Forfeiture
and Order, 18 FCC Rcd 19893, 19896, para. 5 n.22 (2003) (Globcom NAL)
(subsequent history omitted). In the case of USF contributions, providers
whose contribution obligation in a given year is less than $10,000 are
considered de minimis and exempted from contributing to the USF for that
year. See 47 C.F.R. S: 54.708. Filers do not calculate the amounts that
they must contribute in the Quarterly and Annual Worksheets. Rather, the
USF, TRS, NANP, and LNP administrators use the revenue information on
these Worksheets to calculate a funding base and individual contributions
for each support mechanism. See, e.g., 2012 Telecommunications Worksheet
Instructions (FCC Form 499-A) at 31, available at
http://www.fcc.gov/document/2012-form-499-instructions (last visited May
9, 2012).
47 C.F.R. S: 54.713.
See Telseven, LLC "Registration Detail," available at
https://fjallfoss.fcc.gov/coresWeb/searchDetail.do?frn= 0009834466 (last
visited May 15, 2012). Telseven also obtained authorization, pursuant to
Section 214 of the Communications Act and Section 63.18 of the
Commission's rules, to provide international telecommunications services.
See International Authorizations Granted, Public Notice, 19 FCC Rcd 4036
(Int'l Bur. 2004).
Telseven, LLC, d/b/a Calling 101 10 275, Calling 10 1515 800, Calling 10
10 141, Application for Authority to Provide Service in Accordance with
Section 63.18(e)(2) of the Rules, Attach. 1 at Response to Question 9
(filed Feb. 6, 2004) ("Telseven . . . is a competitive provider of
interstate telecommunications services."), available at
http://licensing.fcc.gov/cgibin/ws.exe/prod/ib/forms/reports/swr031b.hts?q_set=V_SITE_ANTENNA_FREQ.file_
numberC/File+Number/%3D/ITC2142004020900047&prepare=&column=V_SITE_ANTENNA_FREQ.file_numberC/File+Number
(last visited May 14, 2012); FCC Form 499 Filer Database Detailed
Information, Filer Identification for Telseven, available at
http://apps.fcc.gov/cgb/form499/499detail.cfm?FilerNum=823700 (last
visited May 11, 2012) (based on Telseven's Form 499 filings, listing all
states except Alaska and Nevada as jurisdictions in which Telseven
provides telecommunications services); see Letter from Wendy M. Creeden,
Counsel for Telseven, LLC, Sullivan & Worcester, LLP, to Elizabeth Mumaw,
Attorney Advisor, Investigations & Hearings Division, FCC Enforcement
Bureau, at Responses to Questions 1-2 (Sept. 22, 2008) (on file in
EB-08-IH-1386) (Telseven Sept. 22 Letter).
Telseven Sept. 22 Letter at Response to Question 2.
See Telseven, LLC, Calling 10, LLC d/b/a California Calling 10, and
Patrick Hines, Response to the Order Instituting Investigation and Denial
of All Assertions of Possible Violation of California Law of Telseven,
LLC, Calling 10, LLC d/b/a California Calling 10, and Patrick Hines, an
Individual, Case No. I.10-12-010, at 9-10 (Cal. Pub. Util. Comm'n, filed
Jan. 21, 2011) (Telseven Response to Cal. Pub. Util. Comm'n Investigation
Order).
See Cal. Pub. Util. Comm'n, Order Instituting Investigation into the
Operations of Telseven, LLC, Calling 10, LLC, and Patrick Hines, Case No.
I.10-12-010, at 7 (issued Dec. 21, 2010) (Cal. Pub. Util. Comm'n
Investigation Order); Post-Hearing Brief of Consumer Protection & Safety
Div., Cal. Pub. Util. Comm'n, Case No. I.10-12-010, at 29 (filed Apr. 6,
2012) (Cal. Pub. Util. Comm'n Post-Hearing Brief); Cal. Pub. Util. Comm'n,
Telseven Hearing, Testimony of Patrick B. Hines, Case No. I.10-12-010, at
389 (Nov. 17, 2011).
See Cal. Pub. Util. Comm'n Post-Hearing Brief at 32.
See Telseven Response to Cal. Pub. Util. Comm'n Investigation Order at 10.
See Cal. Pub. Util. Comm'n, Opening Brief of Calling 10, LLC d/b/a
California Calling 10. Telseven, LLC and Patrick Hines, Case No.
I.10-12-010, at 41 (Cal. Pub. Util. Comm'n, filed Apr. 6, 2011).
See "Telseven.com - Welcome to Telseven LLC," available at
http://telseven.com (Jan. 23, 2012) (on file in EB-08-IH-1386).
See "Telseven.com - Rates," available at http://telseven.com/rate.html
(Jan. 23, 2012) (on file in EB-08-IH-1386).
Letter from Trent B. Harkrader, Deputy Chief, Investigations & Hearings
Division, FCC Enforcement Bureau, to Patrick Hines, Chief Executive
Officer, Telseven (Jul. 2, 2008) (on file in EB-08-IH-1386).
Telseven Sept. 22 Letter.
Letter from Wendy M. Creeden, Counsel for Telseven, to Robert B. Krinsky,
Attorney Advisor, Investigations & Hearings Division, FCC Enforcement
Bureau (Dec. 18, 2009) (on file in EB-08-IH-1386); Letter from Kathy L.
Cooper, Counsel for Telseven, to Michele Berlove, Deputy Div. Chief,
Investigations & Hearings Division, FCC Enforcement Bureau (Jun. 15, 2010)
(on file in EB-08-IH-1386); Letter from Kathy L. Cooper, Counsel for
Telseven, to Robert B. Krinsky, Attorney Advisor, Investigations &
Hearings Division, FCC Enforcement Bureau (Jul. 12, 2010) (on file in
EB-08-IH-1386).
See Telseven Sept. 22 Letter at Response to Questions 9, 11-14; see also,
e.g., E-mail from Fred Theobald, USAC, to Robert Krinsky, Attorney
Advisor, Investigations and Hearings Division, FCC Enforcement Bureau
(Jan. 31, 2012, 13:28 EDT) (attaching USAC billing history for Telseven);
E-mail from Fred Theobald, USAC, to Robert Krinsky, Attorney Advisor,
Investigations and Hearings Division, FCC Enforcement Bureau (Feb. 14,
2012, 9:20 EDT); E-mail from Fred Theobald, USAC, to Robert Krinsky,
Attorney Advisor, Investigations and Hearings Division, FCC Enforcement
Bureau (Apr. 12, 2012, 11:41 EDT); E-mail from Fred Theobald, USAC, to
Robert Krinsky, Attorney Advisor, Investigations and Hearings Division,
FCC Enforcement Bureau (Apr. 13, 2012, 14:04 EDT) (Fourth Theobald
E-mail); E-mail from Fred Theobald, USAC, to Robert Krinsky, Attorney
Advisor, Investigations and Hearings Division, FCC Enforcement Bureau (May
1, 2012, 9:04 EDT) (Fifth Theobald E-mail); E-mail from Fred Theobald,
USAC, to Robert Krinsky, Attorney Advisor, Investigations and Hearings
Division, FCC Enforcement Bureau (May 2, 2012, 13:17 EDT) (Sixth Theobald
E-mail); E-mail from Heather Bambrough, Welch, LLP, to Robert Krinsky,
Attorney Advisor, Investigations and Hearings Division, FCC Enforcement
Bureau (Jan. 24, 2012, 12:16 EDT) (regarding Telseven's NANP payment
deficiency); E-mail from Heather Bambrough, Welch, LLP, to Robert Krinsky,
Attorney Advisor, Investigations and Hearings Division, FCC Enforcement
Bureau (Jan. 24, 2012, 13:49 EDT) (Second Bambrough E-mail); E-mail from
Karen Laffey, Neustar, Inc., to Robert Krinsky, Attorney Advisor,
Investigations and Hearings Division, FCC Enforcement Bureau (Jan. 27,
2012, 16:54 EDT) (E-mail from Karen Laffey, Neustar, Inc., to Robert
Krinsky, Attorney Advisor, Investigations and Hearings Division, FCC
Enforcement Bureau (Apr. 23, 2012, 12:00 EDT) (Second Laffey E-mail)
(attaching spreadsheet listing delinquent invoice amounts); E-mail from
Ann Monahan, Financial Management Specialist, FCC Office of the Managing
Director (Feb. 3, 2012, 9:29 EDT) (First Monahan E-mail); E-mail from Ann
Monahan, Financial Management Specialist, FCC Office of the Managing
Director (Feb. 6, 2012, 16:09 EDT).
Notification from Jason B. Burnett and Paige A. Wagner, GrayRobinson,
P.A., Counsel for Telseven, Notice of Filing Chapter 7 Bankruptcy, U.S.
Bankr. Ct., Mid. Dist. Fla., Jacksonville Div., Case No.: 3:11-bk-2682-PMG
(Apr. 23, 2012) (on file in EB-08-IH-1386) (stating that on April 20, 2012
Telseven had filed for Chapter 7 bankruptcy).
Id.
See Telseven, LLC Homepage, available at http://telseven.com/ (last
visited Apr. 26, 2012) ("Telseven has filed a Chapter 7 Bankruptcy
proceeding in Jacksonville, Florida, Case No. 3:12-bk-02683. The company
is no longer providing services.").
See 47 U.S.C. S: 503(b)(1)(B); 47 C.F.R. S: 1.80(a)(1).
47 U.S.C. S: 312(f)(1).
See H.R. Rep. No. 97-765, 97th Cong. 2d Sess. 51 (1982).
See, e.g., Southern California Broadcasting Co., Memorandum Opinion and
Order, 6 FCC Rcd 4387, 4388, para. 5 (1991) (Southern California
Broadcasting).
See, e.g., Callais Cablevision, Inc., Notice of Apparent Liability for
Monetary Forfeiture, 16 FCC Rcd 1359, 1362, para. 10 (2001) (Callais
Cablevision) (issuing an NAL for, inter alia, a cable television
operator's repeated violation of the cable signal leakage rules).
Southern California Broadcasting, 6 FCC Rcd at 4388, para. 5; Callais
Cablevision, 16 FCC Rcd at 1362, para. 9.
47 U.S.C. S: 503(b); 47 C.F.R. S: 1.80(f).
See, e.g., SBC Communications, Inc., Forfeiture Order, 17 FCC Rcd 7589,
7591, para. 4 (2002).
47 U.S.C. S:S: 251(e)(2), 254(d); 47 C.F.R. S:S: 1.1154, 1.1157(b)(1),
52.17(a), 52.32(a), 54.706, 54.711(a).
47 U.S.C. S: 254(d); 47 C.F.R. S: 54.706(a).
47 C.F.R. S: 54.706(a).
Supra paras. 7-8.
See "Telseven.com - Rates," available at http://telseven.com/rate.html
(Jan. 23, 2012) (on file in EB-08-IH-1386) ("Note that Telseven charges an
administrative recovery fee of $1.65 in any month you dial our directory
assistance service. This fee is intended to offset the cost Telseven
incurs in complying with regulatory obligations and includes the cost of
complying with the Federal Universal Service Charge.").
See Fifth Theobald E-mail (updating on May 1, 2012 Telseven USF data
prepared on January 26, 2012).
47 C.F.R. S: 54.713(e); see also Comprehensive Review of the Universal
Service Fund Management, Administration, and Oversight, Report and Order,
22 FCC Rcd 16372, 16380-81, para. 16 (2007).
See USAC, "Telseven Invoice History," attached to Fourth Theobald E-mail;
Fifth Theobald E-mail; USAC Invoices to Telseven, Invoice Nos.
UBDI0000274287 (statement date Oct. 22, 2007), UBDI0000279222 (statement
date Nov. 22, 2007).
See Telseven's Form 499-Q for Projected Third Quarter Revenues 2009
(received by USAC Apr. 24, 2009); Telseven's Form 499-Q for Projected
Fourth Quarter Revenues 2009) (received by USAC Jul. 23, 2009); see also
Fourth Theobald E-mail. Section 54.708 of the Commission's rules provides,
in pertinent part, that if "a contributor's contribution to universal
service in any given year is less than $10,000 that contributor will not
be required to submit a contribution . . . ." 47 C.F.R. S: 54.708.
See Telseven 2009 Form 499-A Telecommunications Reporting Worksheet
(reporting actual revenues for calendar year 2009) (received by USAC on
Mar. 29, 2010) (Telseven 2009 Form 499-A); Fourth Theobald E-mail.
See Telseven 2010 Form 499-A (reporting 2009 revenue); USAC Invoices to
Telseven, Invoice Nos. UBDI0000432028 (statement date Jul. 22, 2010),
UBDI0000438013 (statement date Aug. 20, 2010), UBDI0000444156 (statement
date Sept. 22, 2010); see also Fourth Theobald E-mail.
USAC Invoice to Telseven, Invoice No. UBDI0000450029 (statement date Oct.
22, 2010); see also Fourth Theobald E-mail.
See 47 C.F.R. S: 54.713(b); USAC Invoices to Telseven, Invoice Nos.
UBDI0000432028 (statement date Jul. 22, 2010), UBDI0000456025 (statement
date Nov. 22, 2010), UBDI0000462005 (statement date Dec. 22, 2010),
UBDI0000466986 (statement date Jan. 21, 2011), UBDI0000472973 (statement
date Feb. 22, 2011); see also Fourth Theobald E-mail.
See supra para. 2 (discussing DCIA).
See, e.g., Telrite Corp., Notice of Apparent Liability for Forfeiture, 23
FCC Rcd 7231, 7239 n.53 (2008) (Telrite NAL); Globcom, Inc. d/b/a Globcom
Global Communications, Order of Forfeiture, 21 FCC Rcd 4710, 4712, para. 5
(2006) (Globcom Forfeiture Order); BCE Nexxia Corp., Notice of Apparent
Liability, 20 FCC Rcd 15121, 15124, 15126, paras. 10, 15 (2005).
See, e.g., Kajeet Inc. and Kajeet/Airlink, LLC, Notice of Apparent
Liability for Forfeiture and Order, 26 FCC Rcd 16684, 16690, para. 13
(2011) (Kajeet NAL); Telrite NAL, 23 FCC Rcd at 7239, para. 16; Globcom
Forfeiture Order, 21 FCC Rcd at 4723, para. 35 n.105 (2006); Matrix
Telecom, Inc., Notice of Apparent Liability for Forfeiture, 15 FCC Rcd
13544, 13546, para. 7 (2000); Conquest Operator Services Corp., Order of
Forfeiture, 14 FCC Rcd 12518, 12525, para. 16 (1999); see also Compass
Global, Inc., Notice of Apparent Liability for Forfeiture, 23 FCC Rcd
6125, 6140, para. 33 (Compass Global NAL); Global Crossing North America,
Inc., Notice of Apparent Liability for Forfeiture, 23 FCC Rcd 6110, 6121,
para. 24 (2008) (Global Crossing NAL).
See 47 C.F.R. S: 54.711(a); Quarterly Reporting Order, 16 FCC Rcd at 5755,
para. 19.
See supra note 63 and accompanying text.
See 47 C.F.R. S: 54.708 (stating that "[i]f a contributor's contribution
to universal service in any given year is less than $10,000 that
contributor will not be required to submit a [USF] contribution . . . for
that year").
See Fourth Theobald E-mail; USAC Invoices to Telseven, Invoice Nos.
UBDI0000432028 (statement date Jul. 22, 2010), UBDI0000438013 (statement
date Aug. 20, 2010), UBDI0000444156 (statement date Sept. 22, 2010);
Telseven's Form 499-A for calendar year 2009 (received by USAC Mar. 29,
2010); USAC Invoices to Telseven, Invoice Nos. UBDI0000432028 (statement
date Jul. 22, 2010), UBDI0000438013 (statement date Aug. 20, 2010),
UBDI0000444156 (statement date Sept. 22, 2010).
47 C.F.R. S: 52.17(b). In particular, contributions to support numbering
administration are based upon a provider's end-user telecommunications
revenues for the prior calendar year and a contribution factor determined
annually by the Chief of the Wireline Competition Bureau, but in no event
will be less than $25. Id. S: 52.17(a). NANP administration contributions
are due on an annual basis, with certain exceptions not relevant here.
See Second Bambrough E-mail.
47 U.S.C. S: 251(e)(2); 47 C.F.R. S: 52.17(a).
See Second Laffey E-mail.
See Account Summary-Telseven, LLC, attached to Second Laffey E-mail.
Id.
Id.
Id.
See 47 U.S.C. S: 251(e)(2); 47 C.F.R. S: 52.32(a).
See 47 C.F.R. S:S: 1.1154, 1.1157(b)(1).
See First Monahan E-mail.
Id.
See 47 C.F.R. S:S: 1.1154, 1.1157. Standard regulatory fees applicable to
common carrier services must be paid in full by the due date. 47 C.F.R. S:
1.1157(b)(1).
See 47 U.S.C. S: 503(b)(1)(B); 47 C.F.R. S: 1.80(a)(2).
See 47 U.S.C. S: 503(b)(2)(B); see also 47 C.F.R. S: 1.80(b)(2); Amendment
of Section 1.80(b) of the Commission's Rules, Adjustment of Forfeiture
Maxima to Reflect Inflation, Order, 23 FCC Rcd 9845 (2008).
47 U.S.C. S: 503(b)(2)(E).
See 47 C.F.R. S: 1.80(b)(4), Note to Paragraph (b)(4): Guidelines for
Assessing Forfeitures.
Id. S: 54.713(e).
See USAC, "Telseven Invoice History," attached to Fourth Theobald E-mail;
Fourth Theobald E-mail; Fifth Theobald E-mail; Sixth Theobald E-mail; USAC
Invoices to Telseven, Invoice Nos. UBDI0000274287 (statement date Oct. 22,
2007), UBDI0000279222 (statement date Nov. 22, 2007).
See, e.g., Kajeet NAL, 26 FCC Rcd at 16694, para. 21; ADMA Telecom, Inc.,
Forfeiture Order, 26 FCC Rcd 4152, 4157, para. 15 (2011)(ADMA Forfeiture
Order); Telrite NAL, 23 FCC Rcd at 7241-42, para. 24.
See 47 U.S.C. S: 254(d).
See, e.g., Kajeet NAL, 26 FCC Rcd at 16694, para. 21; ADMA Forfeiture
Order, 26 FCC Rcd at 4158, para. 15; Globalcom NAL, 25 FCC Rcd at 13485,
para. 16; NTS Communications, Inc., Notice of Apparent Liability for
Forfeiture, 25 FCC Rcd 5137, 5142, paras. 12-13 (2010); Telrite NAL, 23
FCC Rcd at 7242-44, paras. 25-28; Compass Global, NAL, 23 FCC Rcd at
6138-40, paras. 31-34; Global Crossing NAL, 23 FCC Rcd at 6120, para. 21;
OCMC, Inc., Order of Forfeiture, 21 FCC Rcd 10479, 10482, para. 10 (2006);
Globcom Forfeiture Order, 21 FCC Rcd at 4721-24, paras. 31-38.
See, e.g., Kajeet NAL, 26 FCC Rcd at 16696, para. 26; ADMA Telecom,
Inc., Notice of Apparent Liability for Forfeiture, 24 FCC Rcd 838, 852-53,
para. 34 (2009)(ADMA NAL); Telrite NAL, 23 FCC Rcd at 7243, para. 28.
See, e.g., Kajeet NAL, 26 FCC Rcd at 16694, para. 21; ADMA Forfeiture
Order, 26 FCC Rcd at 4159 n.56; Telrite NAL, 23 FCC Rcd at 7245-46, para.
36; Compass Global NAL, 23 FCC Rcd at 6140-42, paras. 34-38; Global
Crossing NAL, 23 FCC Rcd at 6120-23, paras. 21-27.
See USAC Invoice to Telseven, Invoice No. UBDI0000274287 (statement dated
Oct. 22, 2007); see also Fourth Theobald E-mail.
The American Rule of accounting was applied to determine the largest
unpaid invoice. See USAC, "Telseven Invoice History," attached to Fourth
Theobald E-mail; USAC Invoice Telseven, Invoice No. UBDI0000283967
(statement dated Dec. 21, 2007).
See, e.g., ADMA NAL, 24 FCC Rcd at 851-52, para. 31; Telrite NAL, 23 FCC
Rcd at 7244, para. 31.
47 U.S.C. S: 251(e)(2).
See, e.g., ADMA NAL, 24 FCC Rcd at 853, para. 36; Telrite NAL, 23 FCC Rcd
at 7245, para. 33; Teletronics, Inc., Notice of Apparent Liability of
Forfeiture and Order, 20 FCC Rcd 13291, 13303, para. 35 (2005).
See, e.g., Omniat International Telecom, Notice of Apparent Liability for
Forfeiture and Order, 24 FCC Rcd 4265, para. 28 (2009); ADMA NAL, 24 FCC
Rcd at 852, para. 37.
See, e.g., Kajeet NAL, 26 FCC Rcd at 16695, para. 24; Telrite NAL, 23 FCC
Rcd at 7245, para. 34.
See, e.g., Telrite NAL, 23 FCC Rcd at 7245, para. 35.
See id.
See APPC Service, Inc., Data Net Systems, LLC, Davel Communications, Inc.,
Jaroth, Inc. D/B/A Pacific Telemanagement Services, and Intera
Communications Corp., (Complainants) v. NetworkIP, LLC, and Network
Enhanced Telecom, LLP, (Defendants), Memorandum Opinion and Order, 22 FCC
Rcd 4286, 4307, para. 47 (2007) (citations omitted).
Capital Telephone Co. v. FCC, 498 F.2d 734 at 737 (D.C. Cir. 1974)
(Capital Telephone); see Mansfield Journal Co. (FM) v. FCC, 180 F.2d 28,
37 (D.C. Cir. 1950) (piercing corporate veil where one family owned all of
the stock in both entities and the owners took active part in the control
and formulations of both entities).
See Cal. Pub. Util. Comm'n, Hearing Transcript-Testimony of Patrick B.
Hines, Case No. I.10-21-010 at 226-27, (Nov. 16, 2011) (When asked by the
administrative law judge to state his name for the record, Mr. Hines
responded "Patrick Hines, Patrick Brian Hines, H-i-n-e-s"); see also Cal.
Pub. Util. Comm'n, Consumer Protection & Safety Div., Response of Consumer
Protection & Safety Division to Respondent Patrick Hines' Motion to Stay
or Dismiss for Lack of Jurisdiction at 11 (May 4, 2012) (noting that
Patrick B. Hines and P. Brian Hines are the same person, and that Mr.
Hines is using the "P. Brian Hines" presentation of his name for purposes
of the Bankruptcy Court litigation).
See Telseven Sept. 22 Letter at Response to Question 3.
See Calif. Pub. Utilities Comm'n, Case. No. I.10-12-010, Evidentiary
Hearing Transcript at 302; Statement of Financial Affairs, In re:
Telseven, LLC, U.S. Bankr. Ct., Mid. Dist. Fla., Jacksonville Div., Case
No. 3:12-bk-02682-PMG, Item 20 "Current Partners, Officers, Directors, and
Shareholders" (filed May 4, 2012); see also Corporate Ownership Statement
(Rule 7008.1), In re: Telseven, LLC, U.S. Bankr. Ct., Middle Dist. Fla.
(Jacksonville Div.), Case No. 3:12-bk-02682-PMG at Item 20 "Current
Partners, Officers, Directors, and Shareholders" (filed May 4, 2012).
See International Section 214 Application of Telseven, LLC, FCC File
Number ITC2142004020900047, Attachment 2, granted Dec. 1, 2005, DA
05-3129, Report No. TEL-00970.
See Telseven, LLC and California Calling 10, LLC, Response to Inquiry 19
of the Feb. 19, 2009 Data Request from Calif. Pub. Util. Comm'n, (Mar. 20,
2009), incorporated as part of documents assembled in re: Calf. Pub. Util.
Comm'n, Order Instituting Investigation on the Commission's own motion
into the operations, practices, and conduct of Telseven, LLC, Calling 10,
LLC dba California Calling 10, (U-7015-C), and Patrick Hines, an
individual, to determine whether Telseven, Calling 10, and Patrick Hines
have violated the laws, rules and regulations of this State in the
provision of directory assistance services to California consumers, Case
No. I.10-12-010, Document No. PUC0226 at para. 3 (filed Dec. 16, 2010).
See FCC Registration system -Telseven Profile, available at
https://fjallfoss.fcc.gov/coresWeb/serch Detail.do?frn=0009834466 (last
visited May 15, 2012).
See Telseven Sept. 22 Letter at Response to Question 1, Exhibit A:
"Telseven Articles of Organization."
Capital Telephone, 498 F.2d at 738.
47 U.S.C. S: 254(d).
Id. S: 251(e)(2); see also id. S: 159(a) (requiring that the Commission
collect regulatory fees to recover the costs of its regulatory
activities).
47 U.S.C. S: 503(b)(1).
Telseven continues to have unpaid outstanding balances due to USAC, the
LNP and NANP Administrators, and the Commission. We note that payment of
the forfeitures proposed in this NAL will not absolve Telseven of its
obligations to pay its delinquent balances. As discussed above in
paragraph 2, debt collection procedures may include further administrative
efforts both by the Commission and by the United States Treasury or, as
appropriate, referral of the delinquent debt to the Department of Justice
for enforced collection action. 47 C.F.R. S: 1.1917.
47 U.S.C. S: 503(b).
47 C.F.R. S: 1.80.
See 47 C.F.R. S:S: 1.80(f)(3), 1.16.
See 47 C.F.R. S: 1.1914.
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Federal Communications Commission FCC 12-62
Federal Communications Commission FCC 12-62